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L&G predicts profit spike from shorter life expectancy

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Legal & General expects to record profits of up to £400m this year due to its customers not living as long as expected.

On Tuesday the Office for National Statistics reported increases in average life expectancy at birth and age 65, for both men and women in the UK, slowed dramatically from 2011 to 2016.

This has prompted insurers to consider how much capital they have to hold back to pay their annuity customers.

In its half-year results published yesterday Legal & General reported operating profit excluding mortality release from H1 2017 is up 9 per cent.

Legal & General adds it is currently reviewing mortality data from 2016, which it believes could roughly equate to a £300m to £400m reserve release.

Other insurers have predicted similar changes to their balance sheets due to changes in longevity expectations.

Last week Aviva said it released £200m from its reserves.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Our Government will keep pushing the pension age up, however and will still refuse to compensate WASPI women that weren’t informed of their change in pension age until it was too late for them to make financial preparations for it.

  2. So may we expect improved annuity rates? (Don’t hold your breath!)

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